Sony has cut its estimate for profits in the year to March 31st 2014 by around a staggering 70% blaming its cessation of operations in the PC market for nearly $300 million in extra costs.
It reported today that it had "cut its operating profit forecast to 26 billion yen ($254.53 million) from a previous estimate of 80 billion yen, adding that it would book 25 billion yen in impairment losses from its DVD and CD-ROM production unit for fiscal 2013 due to weak demand in Europe."Reuters
reports that, "The company also widened its net loss estimate to 130 billion yen, wider than the 110 billion it forecast in February, when it reversed a previous profit outlook.
"Sony said it would spin-off its TV division into a separate business and sell its Vaio PC business when it announced its third-quarter earnings in early February. A further write-down of the PC division would add another 30 billion yen ($294 million) in costs for 2013-14, Sony announced on Thursday."
All of this news makes the company even more fragile and open to the kind of suggestion made last year by activist investor and hedge fund manager Daniel Loeb to spin off its entertainment business to create more value for shareholders.
Sony shares ended 1 percent higher on Thursday before the announcement. The stock is down 1 percent so far this year after surging 90 percent in 2013. That compares with a 11 percent decline for the benchmark Nikkei since the beginning of 2014.
($1 = 102.15 Japanese yen)